The problem with the Oracle of today is that the focus of a group of the some of the best technology minds in the industry has been hijacked to fulfill a vision that is skewed more towards fulfilling the promise of a decade-old merger and acquisition strategy than it is towards making customers both successful and happy.
What Josh ran into was the standard big software monopoly rent seeking approach to customer relationships. In this strategy the vendor acquires their way toward ever greater footprint then exploits the customers by increased maintenance fees with no concern for customer ROI. Competing products are acquired to capture more users in existing product areas, while more products are acquired to fill out wall street analyst function checklists. Acquired products are then ruthlessly stripped of costs to maintain margins for Wall Street’s satisfaction. Oracle’s results are typical:
Oracle’s applications strategy is the antithesis of integrated , in reality a hairball of products and underlying technologies, data models and deployment models, that could have only been “engineered” by an M&A strategist. Any real engineer would be crucified for pretending this software strategy makes sense for the customer looking for an integrated applications environment.
Because in the end Oracle’s roll-up the best of breed strategy has never been about better TCO for the customers. It’s been about optimizing the sales opportunity for Oracle’s incredibly effective sales machine, while bringing smaller, inefficient software companies under the razor-sharp cost-cutting eye of Safra Catz.
The next step in the big software monopoly rent seeking model is to give lip service to integration and usability while using the monopoly to increase sales of programming services. Customer service in the sense of actually supporting the customers’ business requirements takes a back seat to revenue opportunities. Oracle is right on target here as well:
Oracle’s customers have been pulling out the soldering irons and user manuals in order to realize their vendor’s integrated software stack vision.
There is no magic bullet, no easy-to-configure wizard, for the majority of the integration that Oracle customers require to run their businesses on Oracle software. Nope, it’s all about custom development, using expensive development resources.
Josh concludes that while Wall Street may like Oracle’s strategy, it may actively harm customers.
Right now, Oracle’s case to its customers on the value of engineered systems looks too much like the case it’s making to Wall Street. Until that changes – if it can change – Oracle is headed down a path that at best lacks customer-centricity and at worst is genuinely customer hostile.
An important point to consider, Oracle is not alone in applying the standard big software monopoly rent seeking strategy. Oracle’s results are not atypical. Any software vendor applying this strategy will get similar results, Wall Street’s favor may vary, but the customers suffer in all cases.